VIEWPOINT

THE CRUISE BUSINESS POSTPANDEMIC - COVID-19 LEAVES CRUISE PORTS IN LIMBO

VIEWPOINT

BY PAUL BARTLETT

Following a decade in which cruise ports the world over have made huge investments in new facilities, barely able to believe their luck as the sector’s expansion seemed almost unstoppable, things have come to a very abrupt halt. The billions spent on vast new quays, deep and wide approach channels and manoeuvring basins, ritzy passenger terminals and shoreside transport links are certainly not earning a return at present. Nor, experts suggest, should cruise ports expect any significant payback anytime soon.

However, if or when an effective vaccine is available and cruise ships themselves can be modified so as not to provide a viral Utopia, the sector will recover. There are enough cruise addicts around in countries like the US and Germany, to make sure that the sector finds its feet again after COVID, cruise analysts believe. And there is also an entirely new generation of cruise novices in the Far East, notably China, unlikely to be put off beyond the short term.

However, the sector will inevitably look different. The fleet will be smaller – older cruise vessels are either being recycled right now, or waiting offshore, close to a demolition facility in Turkey or India, for space to be broken up. There will be a reduction in capacity onboard some of the giant vessels across various brands in the Carnival and Royal Caribbean fleets, for example. These ships are equivalent in size to a small town, except that they have many more bars, eateries, gyms and fitness spas. Cruise ship makeovers

Many cruise vessels are likely to require significant modification for operation in a post-pandemic world. Experts are now assessing the refits required for public spaces and cabins but it is thought likely that the number of passengers – or to use the cruise line jargon, ‘guests’ – will have to be reduced. There will have to be more space in public areas, notably bars and restaurants, and embarking and leaving a ship is likely to take longer and require a more structured approach.

There will be other requirements too. Heating, ventilation and air-condition (HVAC) systems will need a major overhaul. Some companies are already working on post-pandemic air treatment technologies. Royal Caribbean, for example, has already tested a new system on-board its $1.4bn, 6,000+ passenger (and 2,000-crew) Oasis of the Seas, delivered by what was then STX Europe’s Finnish shipyard in Turku in 2009. The company claims that the new HVAC system provides a continuous supply of 100% fresh and filtered air from outside to all interior spaces. Air is changed up to 12 times an hour in cabins (which are now called staterooms, by the way) and up to 15 times in public areas. According to reports, the system has been independently assessed by the University of Nebraska Medical Centre. The researchers concluded that cross-contamination of air between adjacent public spaces was extremely low, and undetectable in most cases.

However, a similar reappraisal of shoreside cruise facilities will also be required, leading to substantial capital investment for port authorities who wish to remain on the cruise lines’ calling list. Of course, there are some popular cruise destinations – Venice being perhaps the best example – for which cruise ship calls have lost some of their allure. But for many others, new revenue streams from cruise business have come as a welcome boost.

Port eligibility

The relationship between cruise lines and ports, after the pandemic, is likely to change, therefore. Ports that wish to remain in the game will not only have to comply with local health and safety regulations ashore, but also with the specific requirements of their customers. This is likely to generate a significant capital requirement.

A recent paper – COVID-19 EU Guidance for Cruise Ships – prepared by the European Maritime Safety Agency (EMSA), spelt out some of the measures that are likely to be required ashore. According to the EMSA document, ports will need

The shore power in Tallinn

their own COVID-19 Port Management Plan (or perhaps a more general virus-management plan), “detailing the key processes and key personnel dealing with the implementation of Covid-19 mitigation measures”. The Plan will require the cooperation of various authorities within a port state, EMSA said, including ports themselves, health bodies, terminals, transport providers, customs, home affairs and immigration authorities.

Other repercussions

The virus generally and shipping’s accelerating decarbonisation journey will also have an impact on cruise ship operations. One of the most obvious of these is the adoption of shore power to prevent the need for diesel-burning auxiliaries in port. These systems are already in place in a number of cruise locations, but more will follow.

The Port of Tallinn is a recent example. Financed partly by the European Union through its Twin-Port III programme, the port has invested €3.5m in ABB shore power systems for five of its berths in the Old City Harbour, and ferries on routes linking Estonia to Finland and Sweden

now deploy ‘cold ironing’ technology when they call there.

Tallink Group, the largest passenger and cargo shipping company in the Baltic with a fleet of ro/pax cruise ferries, has invested €3m on the installation of shore power systems for five of its vessels, and has plans for similar arrangements on another seven ships in its fleet. The company’s vessel, Victoria 1, hooked up to shore power for the first time in September. Commenting on the development, Tallink Group CEO, Paavo Nõgene, said, “I am glad that as of today, our ships can use shore power already in two of our Baltic Sea home ports, and we have jointly created the green bridge of shore power between Tallinn and Stockholm, where our ships have been using this Norway’s traditional coastal service between Bergen and Kirkenes has been severely disrupted by the pandemic, leaving coastal communities without their regular calls from Hurtigruten vessels carrying both passengers and goods. Ships belonging to Hurtigruten, which translates as ‘express route’, have fulfilled an essential roll on the country’s west coast where small, isolated communities have relied on regular deliveries from the company’s vessels for decades.

Cruising’s soaring popularity has not gone unnoticed in Norway where Hurtigruten, as the traditional operator, has expanded into high-end expedition cruises to supplement its day-today revenue streams from coastal operations. The strategy is also thought to be a result of the Norwegian authorities’ decision to split the coastal contract between Hurtigruten and Havila Kystruten.

At the same time, international cruise lines have homed in on Norwegian appeal. By some estimates, the country’s coastline is the world’s solution for almost a year now.

Meanwhile, power and automation company, ABB, is rolling out shore power systems in more than 50 ports around the world. South Korea’s Port of Incheon is one example. Systems have been installed by ABB both at the port’s recently opened ferry terminal and cruise facility, South Korea’s largest. The port’s aim of developing its ‘Golden Harbour’ vision at Incheon as a tourism hub for North East Asia was behind the initiative. The ABB system not only means less air pollution in the busy port area, close to the city, but it also has the potential to provide cheaper renewable electricity from sustainable sources with no emis-

NORWEGIAN COMMUNITIES HIT BY CANCELLED COASTAL SERVICES

sions to air. third longest and combines the outstanding natural beauty of coastal waters and vast fjords with the frequently harsh conditions of the open sea both south and north of the Arctic Circle. The result is that in addition to the relatively small vessels on the coastal service, Norwegian waters attract large numbers of giant cruise ships which, during the season, make regular calls at often tiny, remote towns.

These were once communities served only by the traditional Hurtigruten packet steamers. Today, in normal times, a succession of cruise vessels arrive – sometimes more than once a day – disgorging thousands of passengers for shore excursions, staying for just a few hours. While this development has not always been viewed favourably by locals, it has transformed communities and generated substantial revenue streams for commercial enterprises and service providers.

This year, however, local folk are having to adjust to an eerily quiet routine in which large cruise vessels are absent and even the traditional

coastal service has been curtailed. Hurtigruten, as well as other shipping companies including ferry operators, have been forced to cut back services in moves to limit losses.

In mid-October, the country’s Ministry of Transport and Communications, to which Hurtigruten is contracted, requested the company to limit its services only to northern ports lying between Bodo and Kirkenes. The Ministry explained that its strategy was to ensure that remote northern areas could continue to be supplied safely by sea. “We have chosen to prioritise the areas with limited alternatives for the transport of goods and long-distance passengers,” said Transport Minister, Knut Arild Hareide.

Although Hurtigruten vessels operated on the coastal service during this year’s summer, it had scaled back services in the wake of a coronavirus outbreak on one of its expedition vessels. It had previously been granted permission to continue the coastal service at 50% capacity and with no more than 200 people, including passengers and crew, on-board ships.

No one yet knows whether the coastal route will once again operate close to capacity in 2021, or whether next year’s cruise season will herald the return of international cruise operators. However, even if business resumes to a greater or lesser extent, it is likely to operate on a ‘new normal’ that could not have been contemplated before the beginning of 2020.